The effects of the area’s oil and gas industry have rippled into the overall economy, sending the Midland-Odessa Regional Economic Index below year-ago levels for the first time since August 2010. The October index posted its ninth consecutive monthly decline after peaking in January.

Karr Ingham, the Amarillo economist who prepares the index for Security Bank and the Midland Development Corp., said he expects the economy to contract for the foreseeable future.

“We know that until the oil and gas economy turns around and begins to grow again, the overall economy won’t grow either,” he said.

The decline in the overall regional economy was led by consumer activity, which Ingham has called one of the pillars of the economy.

“As consumer activity goes, so goes the economy, and consumer activity is going down,” he said.

Retail sales in October were down 18 percent compared to last October and are down 2.7 percent so far this year compared to last year. Automotive spending continues to fall sharply, with October figures down 26.2 percent from a year ago and year-to-date spending down 18.4 percent from last year.

“Consumers are retrenching, jobs are being lost. Households are not spending as much, some households have lost jobs and have no income. Businesses are spending less. Spending will be as dramatic on the way down as it was on the way up, when we saw 20-30 percent gains,” Ingham said.

Housing has also begun to decline, with the sale of existing homes in October down 28.6 percent from last October and down 9.4 percent so far this year compared to a year ago.

Ingham said that the decline has had little noticeable impact on housing prices, which remain high. The average sales price in October of $251,422 was down 4.1 percent from last October’s average of $262,167, which was more than 12 percent above October 2013 levels. The year-to-date average of $245,643 was down 1.8 percent from $250,066 last year.

Housing prices rose sky-high and have lost little ground “but that will happen,” Ingham said.

Construction continues its fall, with the value of all building permits of $41.16 million in October down 43.4 percent from last October’s $72.7 million. The year-to-date valuation of $667 million is well below last year’s year-to-date total of $1.09 billion.

Business travel to the region, fueled by the oil and gas boom, has stopped contributing to the economy, with a 24.8 percent decline in hotel/motel tax collections and a 13.7 percent decrease in airline boardings.

If there is a silver lining to the downturn, it’s that the Midland-Odessa economy is pulling back from two extraordinary periods of growth dating back to 2002, Ingham said.

“Over time the region will continue to experience and benefit from growth. You won’t lose all that you’ve gained over two periods of phenomenal growth,” he said.

“This is a time of contraction in the oil and gas economy, in the general economy. And we have a ways to go yet,” he said.